Interest Types

LibreFolio supports both Simple and Compound interest calculations.

Simple Interest

Simple interest is calculated only on the principal amount.

Formula:

\[ I = P \times r \times t \]

Where: - \(I\) = Interest - \(P\) = Principal - \(r\) = Annual Interest Rate - \(t\) = Time (in years, calculated using the Day Count Convention)

Compound Interest

Compound interest is calculated on the principal amount plus the accumulated interest from previous periods.

Formula:

\[ A = P \times (1 + \frac{r}{n})^{n \times t} \]

Where: - \(A\) = Final Amount (Principal + Interest) - \(P\) = Principal - \(r\) = Annual Interest Rate - \(n\) = Number of compounding periods per year - \(t\) = Time (in years)